Photographer: Karim Jaafar/AFP/Getty Images
(Bloomberg) — Qatar shut LNG production at the world’s largest export facility after it was targeted in an Iranian drone attack, sending European gas prices surging as much as 54%.
QatarEnergy’s Ras Laffan plant covers about a fifth of global liquefied natural gas supply, and the unprecedented halt now threatens energy security and rattled global markets.
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Europe’s benchmark gas futures jumped by the most since the 2022 crisis caused by Russia’s invasion of Ukraine. LNG shipments from the Middle East had already been disrupted since the weekend as tankers largely stopped transiting the Strait of Hormuz, a critical artery for global fuel flows at the entrance to the Persian Gulf.
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“The threat to security of supply is here and now,” said Simone Tagliapietra, an analyst at Bruegel. “The extent of it will depend on the duration of the shutdown, but we are now into a new scenario.”
While Asian countries buy most of the LNG shipped from the Middle East, a disruption will increase competition for alternative supplies and push up prices worldwide.
European gas inventories are unusually low and the region will need to import large volumes of LNG this summer to refill its tanks before next winter. While regional supplies haven’t been directly disrupted and traders are still assessing how long the conflict will last, benchmark prices rose to a one-year high.
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QatarEnergy has declared force majeure, a clause that allows it to miss contracted deliveries of LNG to customers without penalty due to events beyond its control, according to people with knowledge of the matter. So far, there haven’t been any reports of damage at the facility.
The key question for traders is how long the disruption will last.
US President Donald Trump said the bombing campaign against Iran could last for weeks. The United Arab Emirates and Qatar are privately lobbying allies to help them persuade the US to keep military operations against Iran short, Bloomberg has reported.
If shipping through the Strait of Hormuz were halted for a month, European gas prices could more than double, according to Goldman Sachs Group Inc.
Even if the US boosts LNG production, it’s unlikely to be enough to offset supply from Qatar in the near-term. QatarEnergy is scheduled to start first exports from its Golden Pass expansion project in the US in the coming weeks but the facility might not be at full capacity until next year.
Adding to the market tightness, Israel on Saturday ordered the temporary closure of some of its own gas fields, including its biggest producer Leviathan. That prompted major importer Egypt to seek more LNG cargoes.
Disruptions in the Middle East could also eventually raise spot LNG demand from Turkey, according to BloombergNEF, because it imports pipeline gas from Iran.
The conflict continued to deepen on Monday, with blasts heard across Israel, Saudi Arabia, Qatar and the UAE, which intercepted Iranian missiles launched in retaliatory strikes.
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Dutch front-month futures, Europe’s gas benchmark, settled 39% higher at €44.51 a megawatt-hour. the highest since March 2025.
–With assistance from Salma El Wardany, John Ainger and Ruth Liao.
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